5 Simple Rules for Successful Software Technology Outsourcing
The current economic climate, opportunities and round the clock service necessity requires most companies to outsource many technology projects to countries like India, China and eastern European countries. If you are a small software company, successful outsourcing is crucial to your development. For all the complexity this notion has, success in outsourcing is quite easily achievable as long as it is viewed as a core process in an organization. The list below features a simple set of rules for achieving effective outsourcing.
1. Selecting a partner
Outsourcing service companies vary dramatically in size, infrastructure, capital, language, and talent. Even large well managed companies choose the outsourcing partner based on only one or two factors and face failure. While factors like size and name recognition are important, the winning partner will have the right combination of the factors that suits you and your project needs. Infrastructure, language and talent are much more important factors than size and capital, if you are a software startup or a small software company. I have seen several software projects fail because the partner does not have the right communication infrastructure, like high speed connectivity or easy land line access. Reworks tend to be common place in a project if your partner does not understand phone conversations or email conversations well. Lastly, there is no substitute for talent. Interview every member of the project team and identify the strengths and weaknesses and select based on the project requirement. I have found that many projects suffer due to a lack of depth in a technology. For example, while many programmers may be familiar with Java or .Net, your project might need a specialized understanding of that technology. Don’t compromise on talent.
2. Identifying the right project
This becomes critical especially if it is first project to be outsourced. Matching the project with the right talent in team members is central to the success of the project. It is best to start simple, baby steps. A lot of companies have found success by starting with QA, internal technical support and documentation projects. This provides you with a viable back-up plan should you encounter irreconcilable differences in your first project. All too often, companies tend to easily accept that the first project is likely to fail. Don’t. You should take extra care that this is set up to succeed. Mind you, not all projects are suited for outsourcing. Choose the ones for which face to face communication is not essential. Lastly, ensure that the project is not more than 2 or 3 months in duration.
3. Managing the project
Clichéd as this might be, but, plan the work and work the plan. This is the most important aspect of the project. Have extra clear steps and outline them in a written manner. Perhaps the most important factors that will help you succeed are communication and use of tools. Do not assume anything and ensure that all team members are working on a common communication platform, be it email or any other special tool. Insist on daily or weekly written progress depending upon the project duration. A little bit of patience and attention to details will go a long way in making the project successful. Lastly, fund the project well; cutting corners does not work in Silicon valley, nor will it in Bangalore.
4. Measure the success
Identifying metrics and measuring them in outsourced projects often will determine if the project is going to succeed or fail. Get a list of simple, but comprehensive metrics. For instance, if it is a support project, measure the number of support queries, time it took to respond and whether the response was satisfactory or not. Seems simple, but most project managers take a very casual approach to this. Don’t make that mistake. Insist on the measurement. It helps make a case for the next set of projects.
5. Build on the success
Lastly, it never pays to do the outsourcing just once. It is with repeated success that you gain the needed efficiency. Remember, that is why you started outsourcing in the first place. Create a good document on what succeeded and what failed. Correct the mistakes and do it again for a different project. Adding complexity to succeeding projects will help hone the process.
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ABOUT THE AUTHOR
Alan L. Olsen is the managing partner at Greenstein, Rogoff, Olsen & Co., a top Bay Area CPA firm. He focuses on developing innovative strategies for business enterprises and individuals. A specialist in income tax planning, he frequently lectures and writes articles on tax issues for professional organizations and community groups. His website is ranked one of the top in the nation, featuring tax tools and business leadership articles: http://www.groco.com